This seems to have been talked about over and over again, but we still struggle to find another example that so perfectly outlines cultural strategy, and the related performance & revenue impact of this done right.
For a couple of years now the company has created real buzz in the HR world around their unique culture, and their powerpoint deck on their Freedom & Responsibility Culture, has been viewed on the web more than 5 million times. This is something we have talked about before, but as all oldies but goodies go, we’re going to talk about it again. Why? Well here’s a couple of reasons…
So now we have established why this is worth a read, here’s a couple of Netflix’s pillars for success…
Netflix pride themselves on only hiring responsible adults. By hiring people who make adult level decisions have a passion for high performance and keep the best interests of their company at heart, they believe that 97% of employees will do the right thing. This adult belief system allows the business to provide flexible benefits and incentives, with the same guiding principle “do the right thing for Netflix”. Two of their “non policies” following this ethos are:
Netflix operates an open and honest system to performance management, they hold 360 reviews in which people are asked to identify things that a colleague should start, stop and continue. By being open and truthful there is no need for performance management as it is clear if an employee is performing or not.
Team managers at Netflix are encouraged to create winning teams. Unlike many companies, where managers often lack real autonomy, Netflix requires its managers to envision their goals for their team, then build the right team to execute this goal, therefore recruiting only the right people (not a ‘nearly there’ fit). As part of their strategy for attracting the best people, Netflix operate a market value salary scheme. They pay a person what they are worth in the market. If they grow their skills and become more valuable then they get a raise in salary, if they stay the same, their salary does too.
At Duo we see so many businesses where their cultural aspirations and reality don’t quite match up, and often leaders let a culture happen rather than creating the culture they want. Netflix recognised this and challenge their leaders to consistently create the culture needed for the business to be successful. In addition to leading from the front, they have an awareness and take accountability for management of any sub cultures that appear during growth or company change.
Many HR teams focus on traditional HR incentives or models, as opposed to thinking like business people and focussing on questions like “how can we ensure employees know what we mean by high performance & revenue growth?” At Netflix, the HR team are held responsible for driving innovation and business strategy through their HR activities to ensure that all are linked to business needs and ROI as opposed to traditional HR KPIs.
To look at how you can look at your cultural strategy, and make it work in way that you need it to to reach your business goals, why not book a free virtual 60 minute culture strategy insight session with one of our team?